Liberia: Senate Pro-Tempore Declares Western Cluster MoU Null and Void; Says the Senate Would Request A Temporary Stay Order on Its Operations
MONROVIA – Senate Pro-Tempore Albert Chie has declared the controversial Memorandum of Understanding between the Government of Liberia and Western Cluster null and void.
The Pro-Tempore also announced that the Senate will consult its lawyer and request the Minister of Mines and Energy to place a temporary stay order on the activities of Western Cluster which it is undertaking as the result of the MOU entered; the Senate considers the MOU null and void ab initio.
By: Henry Karmo [email protected]
Sen. Chie: “We want to know the plan for Western Cluster because we know they are mining the DSO (DSO is a sintering fines material) and we know it is proposed for three years. We want to know what will happen after three years to the cargo. Will they escape or will continue to work as per their MDA?
“We need a report from the Liberia Revenue Authority that shows that Western Cluster owes the Government of Liberia US$24 million. We need minutes to show how the decision was reached to waive the “U$14 million”.
“We need to know the formula used to allocate the money (US$5 million) to the counties. After consulting with our lawyers, the Senate will discuss requesting for temporary stop order on activities of Western Cluster through the Ministry of Mines using our oversight responsibilities. As a matter of fact, this Senate doesn’t consider that MOU, we consider it null and void Ab initio.”
Sen. Chie made the statement Thursday after a hearing conducted by the Senate as a committee of a whole with players in the country’s mining sector which include the Minister of Mines and Energy, the Minister of Justice, the Head of the National Investment Commission and the Minister of Finance and Development Planning.
Finance Minister Samuel D. Tweah, Minister of Mines and Energy, Gesler Murray, as well as Minister of Justice, Cllr. Frank Musa- Dean, and National Investment Chairman, Molewuleh B. Gray were witnesses who appeared before the Senate on Thursday.
The heads of the stated ministries and agenccies appeared based on citations extended to them by the Liberian Senate. They appeared to address growing concerns raised by members of the Senate regarding the Western Cluster Agreement, MMG Gold Stoppage of work in Kokoya, Bong County as well as the present work status of Bao Chico and the preparation and resumption of works at China Union.
The decision of Plenary was based on several concerns raised by Senators, who returned from their annual constituency break on Monday, January 16, 2023. The Ministry of Mines & Energy has been scheduled to
During their appearance, Finance Minister Tweah admitted to claims from Senator Edwin Snowe (IND-Bomi County) that the Western Cluster has paid into the account of the Liberian government US$5 million as social development fund to affected counties which include; Bomi, Grand Cape Mount and Gbarpolu but said, the remittance of the money into the Counties accounts has been met to hitches as some counties are demanding more of the money.
On June 8, 2022, Western Cluster Liberia (WCL) broke grounds to begin iron ore mining in Bomi Hill, Bomi County. The project is a 25-year Mineral Development Agreement (MDA) signed between the Government of Liberia and the company in 2011.
The WCL project consists of three iron ore deposits. They are the Bomi Hill mine in Bomi County, the Mano River, and the Bea Mountains in Grand Cape Mount County.
However, a lack of transparency and accountability characterized the contract’s bidding process. Liberian government officials and legislature members were accused of taking bribes to award the iron ore deposits to Elinelto, a shadow company with no mining experience.
Immediately after ratifying the deal, Elenilto sold 51% of its share to Sesa Goa, a Vedanta PLC subsidiary, earning US$90 million. Sesa Goa later purchased Elenilto’s remaining stake in the WCL project for $33 million.
The Ebola outbreak in Liberia in 2014 and low iron ore price prevented the company from beginning the project. The situation led to WCL temporarily deserting the project in anticipation of a better market price.
The agreement provides that WCL pays US$2.8m annually in social development funds to the affected counties (Bomi, Cape Mount, and Gbarpolu). It also requires the company to pay government taxes and royalties and rebuild the railroad, among others.
GoL and WCL signed MOU.
On June 4, 2022, Senator Edwin M. Snow of Bomi County announced that the Government of Liberia and WCL signed an MOU for the commencement of the iron ore project.
In a citizens’ meeting in Tubmanburg, Bomi County, Snow declared, “the Liberian government has wave US$10M of US$20M in taxes owed by Western Cluster.
He noted, “the Liberian government will grant WCL a Class A mining license and a road user permit to pave the way for the start of the project.”
Snow said, “WCL will also make an upfront payment of US$5M in taxes owed the government and US$4.5M to rehabilitate the Monrovia-Tubmanburg highway.”
At the groundbreaking, the Chief Executive Officer of WCL, Sujal Shah, said he is glad his company is doing business with Liberia. He noted that he is optimistic that the project will make an “enviable impact” on the country. He highlighted that the ‘commencement of the project is a dream for his company.’